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Child Support

Contributed by HenryMoser and current to 27 July 2018

Child Support is money paid by one parent (the 'payer') to the other (the 'payee') for the day-to-day living expenses of their child. All parents are expected to contribute to the financial support of their children, regardless of whether they were in a relationship at the time of the child's conception or after birth. Comprehensive information and forms about child support can be found on the Department of Human Services (DHS) - Child Support website.

How separated parents resolve the issue of child support largely depends on whether the parties reach agreement on the basis of their own arrangements (the big issue usually being how much the payer will pay the payee), or whether the DHS 'formula' is used to calculate child support payments.

The DHS will use their formula to calculate the annual rate of child support payable under an administrative assessment unless the assessment is varied by a Court order, a child support agreement, or because the DHS has a specific reason to depart from the formula.

Applying for Child Support

A parent, or non-parent carer who is an eligible carer, can apply to DHS for an administrative assessment of child support for a child if they are not living with the other parent of the child on a genuine domestic basis (if the parents are separated but living under one roof child support may be payable).

A person can make an application:
  • by telephoning DHS on 131 272 to make an application over the telephone; or
  • electronically, by completing and lodging the forms on the DHS website.

The DHS Formula

The annual rate of child support payable is calculated through the use of a formula which considers things like:
  • parents' incomes;
  • the percentage of time each parent cares for the child;
  • the costs of the child.
A child support estimator is available on the DHS website.

If somebody other than a parent is caring for a child then there may be three (or more) parties to a case.

Parties can apply to depart from the assessment if they can establish that there are special circumstances which warrant a reconsideration. For example, a payee may believe that the child has special needs, or the payer may say that their capacity to pay child support is affected by their legal duty to maintain another child or person.

Agreements

The child support legislation allows parents to reach agreement on the amount of child support to be paid. A child support agreement has to meet the requirements of the legislation and has to include matters that can be dealt with in a child support agreement. Child Support agreements can be limited or binding.

Child Support agreements can also provide for child support to be paid in the form of a lump sum which can be beneficial (for example a lump sum payment or a transfer of equity may assist a payee to avoid having to sell a family home). However, the amount of any lump sum must equal or exceed the current annual rate of the current child support assessment. Unless the agreement says otherwise, this type of lump sum operates as a credit against liability created by an assessment or an agreement. The lump sum does not interact with the liability. At the end of the financial year, an amount will be drawn down from the lump sum equivalent to the liability for the year after which the residual amount will be indexed until such time as it is exhausted.

Also, a Child Support agreement can provide for one party to pay specific expenses, such as school fees and other education expenses. Again, these can be in addition to or in lieu of Child Support paid.

Binding Child Support Agreements

These agreements allow parents to make binding financial agreements about child support, and can provide for a payer to pay less than the DHS formula amount of child support. Each party to a binding child support agreement must have received independent legal advice before entering the agreement and attach a certificate confirming the same to the application.

A child support agreement form must be completed and approved before an agreement takes effect. A binding child support agreement must meet certain criteria, and cannot be varied. However, it can be terminated and replaced with a new binding or limited child support agreement. If parties do not consent to ending a binding child support agreement a parent will need to apply to the Court to have this agreement set aside or wait for the agreement to end.

Limited Child Support Agreements

Limited child support agreements require that the amount represented in the agreement must be at least as much as would otherwise have been payable at the annual rate of child support payable under a child support assessment, so a child support assessment has to have occurred. Parties do not need legal advice before entering into a limited child support agreement.

A limited child support agreement can be terminated by either party in certain situations - for example if circumstances change so significantly that the parties should not be locked into an agreement that does not reflect those new circumstances.

Upon acceptance of a limited agreement, DHS will create a 'notional assessment' which is electronically sent to Centrelink to enable the correct calculation of a person's entitlement to the Family Tax Benefit. Parties to a limited agreement may seek a new 'notional assessment' at any time. If the amount of the 'notional assessment' is at least 15% more or less than the previous 'notional assessment', a child support client can ask DHS to end the agreement. The liability will then be determined by the prevailing child support assessment. Either party can also elect to terminate a limited child support agreement after it has been in place for three years.

Other facts about Child Support Agreements

DHS can provide assistance in providing information and helping to navigate which option is best for you, however they cannot provide legal advice or help draft agreements. They can assist practitioners by providing advice on the construction of an agreement. For example, they can advise whether an agreement complies with relevant legislation and can advise on whether the agreement produces the desired outcome. Practitioners can contact the solicitor's hotline on 1800 004 351 and visit the website.

Note that parties don't have to have a DHS formal based agreement to make direct payments to each other (for example, purchase of clothes), third party payments (for example, payment of sporting fees) or prescribed payments (for example, school fees).

Collecting Child Support

General

A registrable maintenance liability is one that can be registered in the Child Support Register for collection by DHS. DHS registers a liability for collection by entering details of the liability in the Child Support Register. This typically involves child support arrangements that are based on the DHS formula; however, a person can also register an agreement, or Court order with the DHS, which will then collect the money on their behalf. This is usually the best way to ensure regular payments. Only approved agreements can be registered.

Where there is a history of regular payments the DHS encourages parents to opt for private collection. If private collection later breaks down, the carer parent can ask the DHS to again start collecting the child support.

Collecting and enforcing child support

The DHS must pursue recovery of all registered child support debts unless they are uneconomical to pursue or not legally recoverable.

DHS can collect child support as voluntary payments from the payer; or by intercepting money which would otherwise be payable to a payer (for example, via a tax refund, or by instructing an employer to make periodic deductions from the wages of a payer). The involvement of a Court is not required.

The DHS can also take payers to Court in some circumstances when all other efforts to obtain child support have failed.

In some circumstances, a payee can also take action in the Federal Circuit Court to recover child support payments even if they have asked DHS to collect their child support.

If you don't agree with a DHS decision

If you don't agree with a DHS decision there are a number of possible actions that you can take. You can object to most DHS decisions in writing or by email. If this doesn't give you satisfaction, you can apply to the Social Security Appeals Tribunal, Administrative Appeals Tribunal, or to a Court. Where a client seeks departure (via the change of assessment process) in relation to a period that is more than 18 months previous, they must first seek the leave of the Court. If the Court grants leave, the Court may hear that departure application or may remit it to be heard by the DHS.

Parentage

When a parent or a non-parent carer asks DHS to make a child support assessment, DHS needs to be satisfied that all parties claiming to be parents are parents of the child. DHS will only be satisfied that a person is a parent in specific fact situations.

DHS can be satisfied that a person is a parent in eight fact situations:

  • the child was born while the person was married to the child's mother or father;
  • the person is named as the child's parent on the child's birth certificate;
  • a Court has found that the person is a parent of the child;
  • the person has executed an instrument such as a statutory declaration acknowledging that they are the child's father or mother (form available on DHS website);
  • the person has adopted the child;
  • the male parent was living with the mother between 20 and 44 weeks immediately before the child's birth;
  • a statutory declaration, or other relevant instrument has been made by a non-parent carer declaring that a parent or both parents are named on the child's birth certificate;
  • the person is a parent under the Family Law Act 1975 (Cth) or the Family Court Act 1997 (WA); for example, the child was born as a result of artificial conception or surrogacy
The DHA cannot be satisfied that a person is a parent of a child solely on the basis of the results of paternity tests, or a person's verbal acknowledgment of parentage. When a woman asserts that a certain man is the father of her child and there is no evidence to support that claim, DHA will refuse that application. What often happens is that the man is invited to have a DNA test. If he refuses to do so, the mother may apply to the Court, and obtain an order that the man complete a DNA test. If he refuses to take the test, the Court may declare that he is the father of the child.

If the man does take a DNA test and is revealed to be the father, the matter will often resolve by the man executing a statutory declaration acknowledging that he is the child's father. This evidence will then support a fresh application for a child support assessment. Otherwise, an application to the Court is likely to result in a Court order declaring that the man is the father of the child. A liability can result so that the mother can recover money that has not been paid, sometimes before the Court application. If a man does take a DNA test and is revealed to be the father, he will usually be expected to pay the costs of the DNA test. If he is not the father, the mother is usually expected to pay the costs of the DNA test. Court orders may be obtained to ensure that the responsible party pays these costs.

A man who does not believe he is the father of a child cannot object to that decision. Instead, he must seek a declaration in Court that the mother was not entitled to the assessment because he is not the parent of the child. When the Court makes such a declaration they must then consider repayment by the mother.

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